- Broadens Novanta's breadth of photonics solutions to the medical market
- Novanta acquires an additional 35 percent of the outstanding shares of Laser Quantum for approximately £25.5 million
Novanta Inc. (NASDAQ: NOVT) (the "Company", "we", "our", "Novanta"), a
global leader and supplier of photonics, precision motion, and vision
technologies to original equipment manufacturers in the medical and
advanced industrial markets, announced today that it has acquired
approximately 35 percent of the outstanding shares of Laser Quantum for
£25.5 million in cash.
Laser Quantum, based in Manchester, United Kingdom, is the leading
supplier to original equipment manufacturers (OEMs) of solid state
continuous wave lasers, femtosecond lasers, and optical light engines
for the medical market.
"Laser Quantum increases Novanta's breadth and technology capability in
photonics solutions for medical applications. Particularly, it gives
Novanta a significant presence in the growing DNA sequencing market, a
technical subsystem capability in software-controlled integration, while
also providing the company with key enabling photonics-based
technologies for instrumentation and life sciences applications such as
biomedical imaging, cell sorting, and ophthalmology," said Matthijs
Glastra, Chief Executive Officer of Novanta Inc. "Our increased
ownership stake brings together two highly successful photonics
businesses, with an emphasis on addressing mission critical applications
within the medical market."
"Laser Quantum is a high quality business, with strong intellectual
property and a long-tenured team that we trust and know well. Laser
Quantum and Novanta have collaborated closely for over 10 years, and
this step is a natural evolution in our partnership," said Mr. Glastra.
"Furthermore, we see strong potential in selling the combined product
offerings of both companies to each company's customer base."
Novanta's ownership position in Laser Quantum has increased from
approximately 41 percent to approximately 76 percent. Prior to this
acquisition of additional shares, Novanta's 41 percent interest in Laser
Quantum was accounted for under the equity method of accounting. After
Novanta's purchase of the incremental 35 percent stake, Laser Quantum
will become a consolidated subsidiary of Novanta and the remaining 24
percent stake in Laser Quantum will be reported as minority interests.
The acquisition will be accounted for similar to a business combination
with all of Laser Quantum's assets and liabilities being reported at
fair value as of the closing date. The excess fair value over the
carrying value attributable to Novanta's existing 41 percent equity
interest shall be recognized as a one-time non-cash gain in Novanta's
consolidated statement of operations. In addition, Novanta and Laser
Quantum have entered into a call and put option for the purchase of all
remaining Laser Quantum outstanding shares held by the minority
shareholders by 2020, subject to certain conditions.
The total purchase price of £25.5 million was financed with cash on hand
and borrowings under the Company's amended and restated credit facility.
The transaction, which is expected to be immediately accretive to
Novanta's free cash flow and non-GAAP earnings per share, is expected to
add approximately $25 million in revenue to Novanta's financial results
on a full year pro forma basis.
Safe Harbor and Forward-Looking Information
Certain statements in this release are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of
1995 and are based on current expectations and assumptions that are
subject to risks and uncertainties. These forward-looking statements
include, but are not limited to, statements regarding operating or
financial results, the success of our internal plans, the prospects for
the acquisition of Laser Quantum to contribute to our future growth and
profit expectations. All statements contained in this news
release that do not relate to matters of historical fact should be
considered forward-looking statements, and are generally identified by
words such as "expect," "intend," "anticipate," "estimate," "believe,"
"future," "could," "should," "plan," "aim," and other similar
expressions. Such statements reflect the current beliefs of Company
management and are not guarantees of future performance. The
forward-looking statements involve risks and uncertainties that could
cause actual results to differ materially from those contained in any
forward-looking statement. Such risks and uncertainties include our
ability to make and integrate our acquisitions and realize expected
synergies. We also face other general risks, including our
ability to realize cost savings from our operating initiatives; general
economic conditions; unfavorable changes in foreign currency exchange
rates; difficulties associated with exports; risks associated with our
international operations; risks associated with newly acquired
businesses; our significant dependence upon our customers' capital
expenditures, which are subject to cyclical market fluctuations;
increased warranty exposure; future competition; violations of our
intellectual property rights and our ability to protect our intellectual
property against infringement by third parties; our ability to attract
and retain key personnel; disruptions in the supply of certain key
materials or components; changes in the price for certain parts and
components; changes in interest rates; changes in tax laws; credit
ratings; risks in complying with local import and export regulations in
the jurisdictions in which we operate; risks and cost associated with
potential write-offs of our substantial intangible assets; and risks
associated with maintaining regulatory compliance. Other
important risk factors that could affect the outcome of the events set
forth in these statements and that could affect the Company's operating
results and financial condition are discussed in Item 1A of our Annual
Report on Form 10-K for the fiscal year ended December 31, 2015, our
subsequent filings with the Securities and Exchange Commission ("SEC"),
and in our future filings with the SEC. Such statements are based on the
Company's beliefs and assumptions and on information currently available
to the Company. The Company disclaims any obligation to update any
forward-looking statements as a result of developments occurring after
the date of this document except as required by law.
About Novanta
Novanta is a leading global supplier of core technology solutions that
give advanced industrial and healthcare OEMs a competitive advantage. We
combine deep expertise at the intersection of photonics and motion with
a proven ability to solve complex technical challenges. This enables
Novanta to engineer core components and sub-systems that deliver extreme
precision and performance, tailored to our customers' demanding
applications. We deliver highly engineered photonics, vision and
precision motion solutions to customers around the world. The driving
force behind our growth is the team of innovative professionals who
share a commitment to innovation and customer success. Novanta's common
shares are quoted on NASDAQ under the ticker symbol "NOVT".
More information about Novanta is available on the Company's website at www.novanta.com.
For additional information, please contact Novanta Inc. Investor
Relations at (781) 266-5137 or InvestorRelations@Novanta.com.